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Posted by Ron Peterson on June 19, 2007, 9:29 pm
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> Say I own 1,000 of XYZ and have for a decade or so ago. Big
> capital gain, even withthe lower rate. Now, say I write some
> ATM calls, 10, for 1 each let's say they expire in three
> months, same tax year. My stock goes from 100 to 105 by day
> of expiration. Instead of letting the stock get called away,
> I buy the options back for 5. Now that is a loss (offset by
> the gain in my stock, yes.) So, do I take a loss on buying
> the options back? Any effect on the tax status of the stock
> I own?
Yes, you take a loss which doesn't affect the status of the
stock you own.
--
Ron
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